parametric estimation for reliable project estimates

Parametric Estimationfor reliable IT Project Estimates

Frank VogelezangManager Pricing Office – Ordina MPC Member – COSMIC

IntroductionFrank Vogelezang

Pricing Office- Setting commercial price for our service offerings- Challenging internal estimates with parametrics

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120 km new railway

Extending the supportfor the method byby targeted guidelines and improved documentation

AgendaParametric Estimation for reliable IT Project Estimates

Estimating

Getting a grip on IT cost and schedule

Functional Size

Translating requirements to manageable numbers

The power of parametrics

Building on proven reference datafor cost and schedule estimationfrom internal or external sources

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EstimatingGetting a grip on IT cost and schedule

Estimating IT projectsTwo essential routes

Objective

Size

Effort

The Expert

Parametrics

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Schedule & Cost

Definition of an estimateGetting grip on IT cost and schedule

An estimate is an analytical and unbiased prediction of how long it takes and what it will cost

The bias comes from the interplay with targets, commitments and plans

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Viable estimation = Reliable estimatesGetting grip on IT cost and schedule

Analytical Can you verify in some way what your experts tell you?

Unbiased Will an expert give the same answer twice?

Prediction 100% certainty costs too much time and resources!

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Functional SizeTranslating requirements to manageable numbers

2.7

M

Functional Size : Function Point AnalysisTranslating requirements to manageable numbers

FPA stands for FunctionPointAnalysis

What the software should be able to do (functionality)Functionexpressed in a number Pointbased on an objectively described method Analysis

Something intangible like functionality becomes a physical number that can be used for calculations

Five ISO/IEC standards: COSMIC, FiSMA, IFPUG, Mk II & NESMA

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Exit (X)

COSMIC Function Point Analysis : ISO/IEC 19761Translating requirements to manageable numbers

Entry (E)

Write (W) Read (R)

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The power of parametricsBuilding on proven reference data

Parametric reality checkBuilding on proven reference data

Paul Masson’sLaw

Parkinson’sLaw

Brooks’Law

Minimal time

Optimal effort

Schedule

Effor

t / C

ost

RealisticProductivity

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How much certainty do you needBuilding on proven reference data

Prob

abili

ty

Schedule / Cost

0%

€ 750

.000

50%

€ 1.

000.

000

75% €

1.25

0.00

0

90% €

1.90

0.00

0First likely option, overly optimistic

50/50 median result, for a balanced portfolio

75% for fixed price projects

90% for safety critical systems

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Keep track of the actual projectWhere will it end?

Schedule Variance

Time Variance

Cost VarianceBudget Variance

Actual costEarned value

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Forecast of the outcome with parametricsBuilding on proven reference data for cost and schedule estimation

ScheduleSlippage

CostOverrun

Actual costEarned valueTotal cost (forecast)Total value (planned)

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The power of parametricsViable estimates and cost-effective projects

Estimate & Plan Create a baseline parametric estimate Develop a Project Plan

Monitor and Control Document actuals Create forecast based on parametrics Re-estimate and establish new baseline

Measure and Analyse Establish variances for the whole project Determine parametric parameters Incorporate this knowledge in future estimates and plans

Estimate&

Plan

Actuals

Baseline

Baseline(s) vsFinal Actuals

Experience &Knowledge

Measure&

Analyse

Monitor&

Control

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frank.vogelezang@ordina.nl

ThePriceofIT.blogspot.com

@FrankVogelezang

FrankVogelezang

www.linkedin.com/in/frankvogelezang

www.cosmicon.com